The PayPal news for bitcoin has driven bullish sentiment, but the numbers offer a gloomier conclusion.
The long rallying cry of digital assets has been “the institutions are coming.” Messari’s research analyst Ryan Watkins recently authored an excellent research piece displaying what the institutionalization of the digital asset space might look like in terms of price attribution to bitcoin.
His analysis uses simple mathematics to navigate to an expected market capitalization (market cap) and per coin price. Starting with assets under management (AUM) for the largest institutional investors multiplied by an allocation percentage range of their AUM to digital assets. The resulting figures can be summed as the “aggregate demand,” which would increase bitcoin’s market cap (sans “exuberance” multiplier for simplicity).
Per Watkins, the above graphic implies “an aggregate 1% institutional allocation to Bitcoin can easily bring Bitcoin’s market cap above $1 trillion, or over $50,000 per BTC.
